Benchmarks minted gains after three consecutive days of
losses, propelled by better-than-expected Chinese trade data and
satisfactory initial claims numbers. Encouraging earnings from
major companies also boosted investors' sentiment yesterday. The
three days of losses owed much to investors' jitters after two
fed officials fueled speculation that the central bank may start
trimming its massive bond buying program next month. Nine
out of the ten S&P 500 industry groups finished in the green
with material sector leading the pack.
For a look at the issues currently facing the markets, make
sure to read today's
Ahead of Wall Street
The Dow Jones Industrial Average (DJI) gained 0.2% to close
the day at 15,498.32. The S&P 500 increased 0.4% to finish
yesterday's trading session at 1,697.48. The tech-laden Nasdaq
Composite Index added 0.4% to end at 3,669.124. The fear-gauge
CBOE Volatility Index (VIX) slipped 1.9% to settle at 12.73.
Consolidated volumes on the New York Stock Exchange, American
Stock Exchange and Nasdaq were roughly 5.81 billion shares, well
below 2013's average of 6.35 billion shares. Advancing stocks
outnumbered the decliners. For 66% shares that advanced, only 31%
Benchmarks have suffered this week on concerns over the future
of the Federal Reserve's bond buying program. Gains in the
equities this year is primarily driven by bond buying program.
Investors are apprehensive about what course the economic growth
may take and the equities' rally is also feared to halt once the
central bank's bond buying program ends.
Yesterday, China's encouraging trade data had much role to
play in the benchmarks' move to the north. According to the data
released by the Customs Administration, exports increased 5.1% in
July from the year-ago period. It was also well ahead of the
expectations of 3% gain. Surprisingly, imports of the country
climbed 10.9% on a year-over-year basis. Owing to this, the trade
surplus of the country contracted to $17.8 billion. Annual
exports to the U.S and Europe increased 5.3% and 2.8%,
Also helping the rally was the U.S. Department of Labor's
initial claims numbers. The number of Americans filing for
unemployment benefits increased 5,000 from prior week's revised
figure to 333,000 in the week ending Aug 3. However, this was
better than the consensus estimate of 339,000. More importantly,
the four week moving average declined from previous week's
revised figure of 341,750 to 335,500, its lowest level in six
years. Improving job market scenario in the recent days indicates
that the health of the U.S economy is improving.
On the earnings front, Tesla Motors Inc (NASDAQ:
) reported strong second quarter earnings. The company's
earnings and revenues blew past the Street's expectations.
Earnings of the company were mostly driven by the success of the
Model S and an improvement in the automotive gross margin.
Revenues increased fifteen times to $405 million from the
year-ago figure of $27 million. The company stated: "While
profits were still modest in absolute terms and not our primary
mission, net income increased by 70 percent from last quarter,
driven by record Model S deliveries and a significant improvement
in automotive gross margin." Shares spiked over 14.0%
Shares of Groupon Inc (NASDAQ:
) jumped 22.0% yesterday after the company announced its
quarterly results late Wednesday. The company's revenues beat the
Street's expectations. Revenues climbed 7.2% to $609 million from
$568 million a year before.
Materials sector was the biggest gainer among the S&P 500
industry groups and the Materials Select Sector SPDR (XLB) gained
1.5%. Stocks such as Alcoa Inc (NYSE:
), Airgas, Inc. (NYSE:
), The Dow Chemical Company (NYSE:
), Monsanto Company (NYSE:
), Airgas, Inc. (NYSE:
) and Huntsman Corporation (NYSE:
) gained 1.5%, 1.7%, 2.5%, 0.4% and 0.3%, respectively.
ALCOA INC (AA): Free Stock Analysis Report
AIRGAS INC (ARG): Free Stock Analysis Report
DOW CHEMICAL (DOW): Free Stock Analysis
GROUPON INC (GRPN): Free Stock Analysis
HUNTSMAN CORP (HUN): Free Stock Analysis
MONSANTO CO-NEW (MON): Free Stock Analysis
TESLA MOTORS (TSLA): Free Stock Analysis
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